‘The employee on maternity leave was definitely the most complicated scenario which led to many discussions’
Finn & Co is an independent hair salon in Northampton with a turnover of approximately £500,000 a year. They have 15 permanent employees working a variety of days and hours each week.
When lockdown was announced by the Government on Monday 23rd March the salon had to close immediately. The bins were emptied, the boilers turned down and the doors were closed. Finn and Russell, the owners of the business, had already been communicating with their staff about possible scenarios and had opened a Slack ‘channel’ to facilitate a simple communication method for the entire team; they had a staff meeting early on Tuesday 23rd March. Thirteen employees were immediately put on furlough (the claim has now been processed and was apparently straightforward to do), one was already receiving sick pay and one was on maternity leave. The employee on maternity leave was the most complicated scenario; due to return to work in July, she offered to return early if she could help the team. However, as the salon is unlikely to open before July and she needs to take accrued holiday before her return to work (which is not currently possible as the salon is closed) she has remained on maternity leave and cannot be on furlough.
An entire week of trading was lost in March but wages still needed to be paid. Finn had recently increased his Lloyds Bank business overdraft which made that process possible. Finn & Co is eligible for a council-funded Retail, Hospitality and Leisure Business Grant of £25,000, which has been approved but not yet received. Northampton Borough Council have seemingly not made the process simple by insisting applications have to be made and slowing down the process, compared with other local councils which have awarded grants automatically.
In case it is some months before the salon can reopen Finn has also applied for a £60,000 loan under the CBILS. He applied via Lloyds Bank two weeks ago but has so far had no form of response. Customers are unable to contact the relevant bank department directly and have to wait to be contacted. Finn is quite prepared to reapply to other banks or financial institutions if his first application is refused.
Costs have been reduced as much as possible. The landlord of the salon building offered a month rent free, which was very helpful, and he has also broken down quarterly rent payments to monthly. The next rent payment is due on 1st May, so an assessment will be made then depending on whether the Council grant has been received, etc. The repayments for an existing loan taken out through Funding Circle are still being paid in full as Funding Circle have proved very difficult to contact and a leasing contract is also being paid as the process to request a payment holiday involved an enormous amount of paperwork. Those costs will be revisited if necessary.
What might be the way forward for Finn & Co? They are tentatively planning on being able to reopen in July, but that may be with strict social distancing measures in place, so only a few clients and staff are allowed in the salon at one time. The plan is to open six full days from 10am to 8pm to fit in as many clients as possible, regardless of what measures need to be in place. If July opening does not prove possible then appointments will be moved forward as necessary.